Entire Section

  • AMI 7.2.4 AMI 7.2.4

    (1) A Clearing House must have effective means to address risks relating to:
    (a) custody of its own assets, in accordance with (2); and
    (b) investments, in accordance with (3).
    (2) For the purposes of (1)(a), a Clearing House must:
    (a) hold its own assets with entities which are Licensed by the DFSA or a Financial Services Regulator for holding deposits or providing custody, as appropriate;
    (b) be able to have prompt access to its assets when required; and
    (c) regularly evaluate and understand its exposures to entities which hold its assets.
    (3) For the purposes of (1)(b), a Clearing House must ensure that:
    (i) it has an investment strategy which is consistent with its overall risk-management strategy and is fully disclosed to its Members and other participants using its facilities; and
    (ii) its investments comprise instruments with minimal credit, market, and liquidity risks. For this purpose, the investments must be secured by, or be claims on, high-quality obligors, allowing for quick liquidation with little, if any, adverse price effect.
    Derived from RM118/2013 [VER15/07-13]

    • AMI 7.2.4 Guidance

      A Clearing House which holds assets for its Members and other participants is subject to the "safe custody" requirements in section 5.10. In addition to those requirements, a Clearing House is required to manage risks associated with custody of its own assets (which may comprise cash) under Rule 7.2.4.

      Derived from RM118/2013 [VER15/07-13]